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Dynamics of Natural Gas Consumption, Output and Trade: Empirical Evidence from the Emerging Economies

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  • Md. Samsul Alam
  • Sudharshan Reddy Paramati
  • Muhammad Shahbaz
  • Mita Bhattacharya

Abstract

This study examines the dynamic relationship between natural gas consumption, output, and trade in a sample of fifteen emerging economies using quarterly data for the period of 1990-2012. We employ the robust panel cointegration techniques and a heterogeneous panel causality test. Our findings confirm the presence of long-run association between natural gas consumption, output and trade. The short-run heterogeneous panel causality test suggests that natural gas consumption has feedback effect between economic growth and international trade. These findings have important implications for energy and environmental policies. The conservation policies that are designed to reduce natural gas consumption have an adverse effect on both economic growth and trade. We suggest future energy policies should focus on improving energy supply, and formulate appropriate channels to attract investments into renewable energy production with greater involvement of public-private partnership initiatives.

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  • Md. Samsul Alam & Sudharshan Reddy Paramati & Muhammad Shahbaz & Mita Bhattacharya, 2015. "Dynamics of Natural Gas Consumption, Output and Trade: Empirical Evidence from the Emerging Economies," Monash Economics Working Papers 21-15, Monash University, Department of Economics.
    • Handle: RePEc:mos:moswps:2015-21
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    More about this item

    Keywords

    Natural gas consumption; economic growth; trade; emerging economies;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy

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